Payroll Processing & Systems Flashcards
7 cards from real CPS practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Payroll Processing & Systems flashcards as text
Which of the following is an example of an imputed income item that must be added to employee wages for tax withholding purposes?
Answer: Group-term life insurance coverage exceeding $50,000
The cost of employer-provided group-term life insurance coverage above $50,000 is imputed income subject to federal income tax and FICA.
What is the primary advantage of using a self-service employee portal integrated with the payroll system?
Answer: It reduces payroll processing errors by allowing employees to update personal data directly with built-in validations
Self-service portals with validation rules reduce data entry errors and administrative burden by letting employees maintain their own records within controlled parameters.
Under the FLSA fluctuating workweek (FWW) method, an employee receives a fixed salary of $600/week. In a week with 50 hours worked, what is the additional overtime compensation owed?
Answer: $60.00
Under FWW, regular rate = $600/50 = $12/hr; the salary already covers straight time, so only 0.5 × $12 × 10 OT hours = $60 in overtime premium is owed.
A payroll system must support multi-state payroll for employees who live in State A and work in State B. Which concept determines which state's income tax the employer must withhold?
Answer: Reciprocity agreements between states may allow withholding only for the resident state
Reciprocity agreements between certain states allow employers to withhold only for the employee's state of residence, simplifying multi-state compliance.
Which payroll system control BEST prevents a payroll administrator from both creating a new employee record and approving that employee's first paycheck?
Answer: Segregation of duties enforced through role-based access controls
Role-based access controls enforce segregation of duties by ensuring no single user has permission to both create employees and approve payments.
An employer discovers that FICA taxes were under-withheld from an employee's wages for three months. The employee has since left the company. Who bears the cost of the uncollected employee FICA share?
Answer: The employer must pay both the employee and employer shares and may not recover the employee share
When the employer can no longer collect the employee's FICA from wages, the employer becomes liable for the uncollected employee share in addition to the employer share.
Which payroll system feature automatically applies the correct state unemployment insurance (SUI) wage base when an employee's year-to-date (YTD) earnings cross the taxable limit?
Answer: Wage base cap enforcement within the payroll calculation engine
The payroll calculation engine tracks YTD earnings and stops applying SUI tax once wages exceed the state's annual taxable wage base.